Foreclosures fall in Sunshine State -- except in Central Florida

July 17, 2014|By Mary Shanklin, Orlando Sentinel

Central Florida appears to be an island of increasing foreclosure activity in the middleof a state where the business of repossessing houses has declined during the past year, a study released today shows.

In Metropolitan Orlando, foreclosure legal filings increased 20 percent in June from a year ago and the region ranked second nationally for its foreclosure rate in June, according to real estate research firm RealtyTrac. Metro Orlando houses received 2,663 notices in June. And the amount of activity also increased for nearby Volusia and Polk counties last month from a year earlier.

In contrast, Florida's foreclosure actions actually dropped 13 percent during that time. In addition, the Tampa, Miami and Jacksonville metro areas all experienced foreclosure declines during the last year. Nationally, filings were down 16 percent from June 2013.

Orlando's deeper dive into foreclosure during the last year may reflect lenders' increasing impatience with holding onto the properties. They may be less interested in sitting on vacant residential asset pools at a time when homes are no longer increasing in value as much as they did in the past, said Daren Blomquist, vice president of RealtyTrac.

"It's a reflection that even while the foreclosure starts are down — meaning fewer homeowners are going into foreclosure — more people who have been in foreclosure are now going to the auction block and losing their homes," Blomquist said. "Certainly the slower home-price appreciation means that banks have less to gain by holding onto foreclosures for a longer period of time."

How much have home values been rising in the four-county Orlando region, which includes Orange, Lake, Seminole and Osceola counties? RealtyTrac reported year-over-year appreciation of 13 percent for Orlando residential properties in June from a year earlier, which was far less significant than year-over-year price gains as high as 23 percent during points in 2013.

Even if the banks are more motivated to dispose of their distress properties now that prices have softened somewhat, it does appear they are still taking substantial losses on Orlando-area foreclosures. Blomquist said lenders are taking an average loss of about $100,000 on Metro Orlando houses they are auctioning off.

One thing that is certain for Orlando is that its mounting volume of foreclosures does not indicate that homebuyers who purchased in recent years are the ones getting into trouble now.

RealtyTrac analyzed the recent foreclosures in the metro area and found that 60 percent of houses that received a notice during June were saddled with mortgages originated in the boom years of 2005, 2006 and 2007. Of the Orlando-area properties that got foreclosure notices in June, only 6 percent had been financed with mortgages approved during the past three years.

In June, Florida once again led the nation in foreclosure rates, with one legal notice for every 409 homes. Even though foreclosures appear to be dissipating throughout the state, eight of the nation's top 10 foreclosure markets for June were in the Sunshine State.

And in the Orlando area, one house got a foreclosure-related notice for every 353 homes in the region.